Rent control has been banned statewide in Massachusetts since 1994, but there’s a movement to bring it back. Would that be a good idea?
As always, it depends.
We can all agree that people need stable, affordable places to live, and we’re horrified to see people facing displacement when their rent rises 25% or even 50% overnight. The federal government helps homeowners keep their housing costs stable by subsidizing fixed-rate mortgages. So why shouldn’t we use state and federal policies to keep rental costs stable as well?
One reason is that rent control can backfire badly in several ways:
- Rents may not cover the cost of maintenance or reduce the incentive for maintenance, so landlords may allow buildings to fall into disrepair.
- Reduced profit may encourage landlords to convert their apartments to condominiums and sell them, meaning there are fewer rentals available at all.
- It might reduce the profit in building new buildings, so they won’t get built at all, exacerbating the housing crisis. Think of the Cruel Game of Musical Chairs metaphor: rent control guarantees that certain people get to keep their seats, but it doesn’t mean that everyone gets a seat.
That third item is the biggest one for opponents of rent control. They aren’t opposed to stable rents, of course. They just think that the best way to keep prices moderate is by building lots of new housing, so landlords have to compete. That’s the essence of the YIMBY idea, and research supports it. Compare the rents around Boston with those in fast-growing Charlotte, NC: the Boston area blocks new housing construction and has high rents, while the Charlotte area has allowed vast amounts of new construction and has moderate rents.
So, is there a way that rent control could give us price stability without the bad side-effects?
The policy proposed by Boston Mayor Michelle Wu has two interesting ideas that might help: To keep rents stable but still allow some adjustment to the cost of maintenance, her proposal sets a maximum increase tied to inflation. To encourage the construction of new housing, it applies only to buildings more than 15 years old.
To distinguish this set of rules from a policy that places a hard cap on rent increases, it’s often called rent stabilization rather than rent control. This stabilization-focused set of policies has gained support from groups like Strong Towns, which describe it as “an anti-displacement policy, not an affordability policy.” That is, a good stabilization policy creates predictability, which means people won’t wind up being forced to move without notice.
Does Somerville YIMBY support rent control?
The Somerville YIMBY membership doesn’t have a complete consensus on rent stabilization. Those of us who do support it point to the urgency of the housing crisis and the need for people to be protected from displacement right now. Those of us who oppose it point to the need to build more homes, and the fact that rent control could slow or stop building. We do all agree that, if implemented, rent control rules must be crafted very carefully to avoid blocking new housing.
Just like Inclusionary Zoning (IZ), rent stabilization definitely helps some tenants, but the housing crisis will persist until there are enough homes for everyone. And if rent control is so strict that it prevents the construction of enough homes for everyone, it will make the housing crisis worse.